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Sunday, July 23, 2017

The
day after Diwali, Delhi woke up to a rude shock. Smog had enveloped the whole
city making it difficult to breathe. The PM 2.5 particles were almost three to
four times more than the accepted level. Experts envisage that if Delhi does
not get its act together soon it could see a situation akin to the Great London
Smog that took the lives of thousands.
The presence of the PM 2.5 particles is particularly harmful for
children and the old. These particles enter the lungs and can result in a
number of respiratory problems which increases the mortality factor quite
considerably. While the environmental concerns are being discussed in a broad
manner, an issue that remains out of the limelight is India’s new emerging
health challenges.

A
globalised world has also become a more connected world where events affect a
large number of human beings. While boundaries are being transcended there is
also cross border exchange of diseases and emergence of new forms of disease.
And it is this threat that India is facing that challenges the traditional
paradigm of health and disease. While Indian health infrastructure grapples
with the basic issue of access and facilities, new challenges are being thrown
that policymakers have to face.

Today
the Indian health profile is changing rapidly. As a large part of India moves
to the urban areas, new challenges have emerged. Slowly, two different
paradigms of health concerns are manifesting itself. The rural populace of the
country still grapples with the issue of malnutrition, arsenic mixed in water,
anaemia among others. Nutritional issues concerning health are a major problem
in the rural areas. In the urban areas the profile is slightly different. Urban
India is beginning to see rise in cardiovascular diseases, diabetes,
respiratory problems among others. A large part of health problems in urban
India can be attributed to the `lifestyle choices’ that are made and hence are
non communicable in nature. Thus the health sector in India has to effectively combat
this rising “Health Divide”.

Today
the global boundaries have disappeared and so have boundaries that contained
disease. Bird Flu, for example, was a disease that was hitherto unknown to
India but has become a much focussed area in the past few years. During the past three decades more than 30
new organisms have been identified worldwide including HIV, Vibrio cholera
O139, SARS, corona virus, highly pathogenic avian influenza virus A, and novel
H1N1 influenza virus. Many of these organisms emerged in the developing
countries of Asia.Every global outbreak
of Bird Flu or Bovine Flu poses new challenges for the Indian health sector.
While they have been effective in this fight till the recent times, there is no
guarantee that this resilience might sustain in the nature. Hence there is an
urgent need to keep an eye on each
emerging global health concern and prepare a roadmap to combat each disease
effectively. India, which boasts of a phenomenal pharmaceutical industry, must
also offer its expertise to global drug makers in times of need, even before a
particular disease hits the Indian shores. This would ensure that should a
disease or a health concern hit the boundary our drug makers are prepared to
the extent possible to handle any eventuality.

While
India has been able to effectively curb malaria, new forms of vector borne
diseases have emerged that have posed new challenges to the health sector.
Dengue and Chikungunya which were previously unknown in the Indian medical
history have become major headache in the past few years. Dengue, for example,
is witnessing a rapid increase in its profile. While a decade back dengue was
restricted only to parts of Northern India, in recent times it has spread to
the Eastern part of the country as well. In 2015, according to the WHO website,
India reported close to 15,000 cases of dengue, the highest in a decade. On
September 6, 2016 this figure stood at 19,704. This undoubtedly proves that
newer diseases are posing newer challenges to the policymakers that they must
address effectively.

As
argued above, non communicable diseases pose a special challenge to the health
of urban India. Today obesity and diabetes has become a regular occurrence in
almost every major urban Indian household. If a person steps outside in order
to break the monotony of a sedentary lifestyle, the polluted air increases the
chance of respiratory diseases. Lifestyle habits have also increased the
chances of cardiovascular diseases. Non communicable diseases account for 56%
of deaths in urban areas. If we were to factor in other factors like road
accidents, for example, this number would climb still higher. To counter threat
of non communicable diseases however, infrastructure and doctors wouldn’t be
able to provide the solution again. Awareness is one of the most vital weapons
in the fight against urban non communicable diseases. Mental health for example
is still an unexplored area. The people have to be made aware that mental
health is of equal importance as physical health in the life of an individual.
Sanitisation campaigns should be unveiled about food habits and the need for
physical activities in a person’s life while setting up measures that would
dissuade people especially children from certain kind of food should be
encouraged. These steps would go a long way in improving the results of the
fight against non communicable diseases.

Antimicrobial
resistance demands a special mention in the fight to better India’s health
profile. India’s global reputation took a major beating when in 2008 India’s
name was attached to a super bug, the NDM-1.
The New Delhi Metallo-beta-lactamase-1
was an enzyme that rendered bacteria resistant to a broad spectrum of
antibiotics. A strain of the NDM-1 had crossed the shores and spread resistance
to other countries as well. And slowly India woke up to this new challenge. In
2010 India was the largest consumer of antibiotics in the world. Years of over
the counter prescription and medication without proper consultation hadresulted
in disastrous consequences rendering many drugs useless.Attempts are however
being made to control this aspect, new bills have been introduced which have
made procurements of certain kinds of drugs harder. New regulations have come
in place which make the availability of Schedule –H drugs over the counter
almost impossible. Further steps have to be taken in this regard while
consistently evolving newer strategies to counter over the counter sell of
antibiotics.

Despite
the obvious challenges there is however no doubt that India has performed
remarkably in the health sector. Diseases like polio have been wiped clean from
the country through sustained efforts and people’s participation. Diseases like
Smallpox and guinea worm have been
eradicated; their last cases occurred in the country in May 1975 and July 1996
respectively. Yaws, which mainly occurs in remote tribal areas, has been
eliminated. The average life expectancy in India has risen from 36.5 years in
1951 to 63.5 in 2011. Maternal Mortality Rates and Infant mortality rates have
improved considerably as well. Today India boasts or world class medical
education. Indian doctors and India’s medical facilities are recognised amongst
the best in the world in affordable prices on a global level. In the past sixty
years, India has demonstrated remarkable will in responding to the challenges
of the health sector. In a similar spirit, it must focus itself towards
combating the new forms of health concerns grappling its people.

Tuesday, November 22, 2016

The passage of the Goods and Services Tax
(GST) Bill, officially called the Constitution (One Hundred and Twenty Second
Amendment) Bill, 2014 recently passed in
the Rajya Sabha is seen as one of the biggest reforms undertaken by the
government since the opening up of the economy in 1990. While there is some
road still left to be travelled towards implementation, yet its passage in the
Parliament ensures that it will be a reality soon. The GST seeks to replace
Central Excise Duty, Service Tax and at the same time will subsume State VAT,
Central Sales Tax, and Purchase Tax, among other taxes. In effect, this bill
seeks to end the cascading effect of indirect taxation in India.

Before understanding GST, we must understand
the present system of indirect taxation prevalent in India. The constitution divides taxation powers between
centre and states. Both levels of government have some exclusive areas where
they can levy tax. Income tax, which includes tax on company profits, is in the
exclusive domain of central government. These taxes are referred to as direct
taxes. Indirect taxes are taxes levied on manufacture of goods, provision of
services and consumption, which are again in exclusive domain of central
government. Taxes on consumption, on the other hand, are under the exclusive
domain of state governments.

This system of indirect
taxation had some problems. First, there was the issue of multiplicity of
taxes. From the moment a product was manufactured, it was treated to a bevy of
taxes from central excise to VAT. This
added to the total cost of the product which was borne by the final customer.
Another problem was that, different states had different taxation rates. Some
states had lower VAT rates compared to others. This created a chance of tax
evasion and states lost out on revenue that it had to earn.

GST seeks to correct these anomalies in the
system. It
seeks to replace the indirect tax regime in India which is replete with
multiplicity of laws and barriers in interstate movement of goods. At the fundamental, GST is a
value added tax. This will be levied at all points in the supply chain where
credits will be allowed for any tax paid on inputs acquired for use in making
the output. Since the GST will be tax added on each stage of value addition,
the final consumer will bear the GST charged by the last dealer in the supply
chain, with set off benefits for all previous stages. It would be applicable
for both goods and services wherein the exemptions given are minimum. A
minimalistic system that has less discretion will function as a much more
transparent and robust system. The GST regime seeks to correct those faults
that were present in the indirect taxation regime. GST will make India one
unified market.

GST will seek to help the consumer in the following ways. First, all
taxes will be collected at the point of consumption. This means that if any
product is taxed at 18% (which is the GST rate fixed for now), it will include
both central government’s taxes and state government’s taxes. This will
decrease the cost of goods in long run and can create an environment of lower
inflation rates in the country. Seen in this light, GST can also play an
important role towards achieving the recently announced inflation policy where
the government will attempt to keep inflation at 4% with tolerance level pegged
upto 2%. Second, once barriers between states are removed, we as consumers will
not end up paying “tax on tax” which is what happens when goods move across
state borders. It will also widen the tax base which is necessary for lowering
tax rates and eliminating classifications. GST will result in harmonisation of
Central and State tax systems which would reduce duplication and compliance
costs. The automation of compliance costs will also result in reduction of
errors, thereby increasing efficiency.

In keeping with the federal structure of the country, GST will have two
components: Centre GST (CGST) and States GST (SGST). This is keeping in mind
the fact that base and essential design features would be same. Both the system
will be based on tax on the destination model.Thus, exports would be zero-rated, and imports would
attract the tax in the same manner as domestic goods and services. Inter-State
supplies within India would attract an Integrated GST (aggregate of CGST and
the SGST of the destination State). The GST will be accompanied by the GSTN
which will work towards capacity building among others. Officers are already
being trained towards administering the new GST.

However the GST will face stiff challenges in its road
to implementation in the coming years. The first challenge percolates to the
rate at which GST will be launched. The prevailing sentiments seems to be at 18%,
which will finally be decided and yet to be notified by GST council, in the
long run. While different studies have pointed to different rates, it would
undoubtedly help the consumers when the present rate would be fixed at a level
which would negate the cascading effects of indirect taxation.

Another challenge that has to be encountered is
administering the GST with minimum exemptions. New Zealand had the best GST
model when it started out with the taxation rate fixed at 10% with almost zero
exemption rates. However as most taxation analysts would like to point, tax
policies can never be fixated in one particular realm, as with changing
circumstances and economic behaviour, taxation policies need to change as well.
Today, New Zealand has increased its taxation rate from 10% to 15% .Countries
have fared better in administering the GST regime when they have reduced the
exemption while widening the base. This is the challenge India will hope to
encounter and successfully resolve.

The third challenge would be the implementation itself.
India since its independence has achieved its political unity while the
economic unity remains a distant dream. India is composed of various states
with different financial standings .While states like Maharashtra and Gujarat
are capable of generating their own revenues, the north eastern states, for
example, are not on a strong financial footing. Yet the GST will seek to treat
every state equally. While this would be challenging, yet it would also
harmonise the country as an economic entity in the end. In the long run, GST
seeks to benefit all and can truly act as a harbinger of the next round of
economic reforms. The road to the same is tricky but the goal is worth it.